Behind the numbers: Insights into large audit firm sampling policies

Brant E. Christensen, Randal J. Elder, Steven M. Glover

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


Changes in the audit industry after the Sarbanes-Oxley Act, including mandatory audits of internal control over financial reporting and PCAOB oversight and inspection of audit work, have potentially changed the nature and extent of audit sampling in the largest accounting firms. However, little academic evidence exists on these firms’ current audit sampling policies (Elder, Akresh, Glover, Higgs, and Liljegren 2013). As such, we administer an extensive, open-ended survey to the national office of the Big 4 and two other international accounting firms regarding their firm’s audit sampling policies. We find variation among the largest auditing firms’ policies in their use of statistical and nonstatistical sampling methods and in inputs used in the sampling applications that could result in different sample sizes. Sampling experts’ internal reviews indicate that projecting and resolving identified misstatements is one of the biggest difficulties that audit engagement teams face when using sampling techniques. Finally, we present evidence that some firms have significantly changed their approach to revenue testing due to PCAOB inspections. This evidence provides important insights into current sampling policies and presents opportunities for future research.

Original languageEnglish (US)
Pages (from-to)61-81
Number of pages21
JournalAccounting Horizons
Issue number1
StatePublished - Mar 2015


  • Audit misstatements
  • Audit sampling
  • Materiality
  • Statistical sampling

ASJC Scopus subject areas

  • Accounting


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